The Wisconsin Of China: Got Milk, but Hold The Cheese

Published: April 8, 2003

(Page 2 of 2)

The Yili Corporation and other dairy companies are installing milking stations in small villages that still burn small pots of coal to cook and heat their houses. The companies are also offering loans to small farmers eager to bolster production.

But agriculture experts in China know that one of the major obstacles to higher production is inefficiency in the production system. While the average cow in the United States yields over 17,600 pounds of milk each year, the average cow in China yields less than 8,800 pounds, according to the Department of Agriculture.

Industry experts call some of the conditions woeful.

''Some of these conditions are really primitive,'' said Barry Murphy, a sales manager who traveled to Hohhot in March for DSM Food Specialties, a dairy company based in the Netherlands. ''Some of these farmers think their cows are pigs, so they'll feed them anything.''

But the environment in the north seems mostly suitable for the establishment of a Dairy Belt. The region is cool, flat and relatively unpopulated.

One worry, however, is that environmental issues could slow the push for dairy developments here. For years, there have been concerns that cows, sheep and goats in the region have been overgrazing. The government has begun placing restrictions on grazing and even begun fencing in some properties in an attempt to halt the overgrazing.

Some in the government believe the depleted grasslands may be contributing to the dust storms that periodically sweep across the northern steppes and then flow down toward big cities like Beijing.

Farmers, however, are looking forward to expanding their operations. They are confident because of the progress they have made in recent years. Most no longer milk by hand. And though many farmers admit to knowing little about where their milk ends up, farm incomes have jumped from about $300 a year a decade ago to close to $2,000 a year now.

''I'm much better off now,'' says Gong Yougui, 55, who has six cows and three-fifths of an acre in this area. ''You can feel the changes. People around here have furniture, televisions and tractors.''

So after decades of tilling the soil to produce food for their families and local communities, farmers throughout this region are starting to abandon traditional crops like corn and wheat in favor of dairy cows.

Indeed, many people here like to point out how well nearby villages are doing.

''There's a village about 2 kilometers from here called Yunheshe, where people with 10 cows have cellphones and motorcycles,'' says Niu Hongwei, a 33-year-old dairy farmer here.

In Yunheshe, a former construction worker named Li Tengwei, 37, says the village of Shebiye does even better because it has a larger dairy operation. The village is divided: people live on one side of the main road and large, gated dairy farms holding about 10 cows each exist on the other side.

''We don't live in mud houses anymore,'' Mr. Li says.

And there are bigger dairy farms on the way. From Shebiye, visitors can see the new developments coming in the rows and rows of bricks piled six and eight feet high for the dozens of dairy farms under construction.

Dairy farmers here like to show visitors the old part of Shebiye, a dilapidated village of old mud houses, many of them abandoned or occupied by squatters.

In the place of these older houses are newer but still modest brick homes, with a television set the prized piece of furniture.

Farmers here say the growing demand for milk made much of this possible. This came about because of striking changes in the agriculture system.

The new dairy farms have evolved out of a system that has dominated China for decades, a system of small plots of land, about one acre, where each farmer grew for the family and sold the excess to the local community.

Now, farmers are getting used to a market system. And for the last decade, despite some big price drops, the market has been good to them. Farmers who used to earn $200 a year selling excess corn and vegetables are now making $700 for each cow they own.

No one in this part of the world knows how sustainable the milk boom is going to be in China. But everyone's counting on higher dairy consumption in the coming years.

And so while dairy farms here may never rival the 10,000-head operations in the Western United States, farmers like Mr. Wang think the boom will carry through to his son's generation.

''I think he'll be doing the same thing,'' Mr. Wang says, running his hand through his hair. ''And this will still be good work.''

Photo: Wang Ergo has four cows at his small but thriving dairy farm in Inner Mongolia. ''My income is very good,'' he said. ''I can afford a television and a sound education for my son. And it's not very hard work.'' (David Barboza/The New York Times)(pg. C8)